Too Much GI Bill Money Going To For-Profit Schools?
News > Education
Larry Abramson
Thursday, September 22, 2011 at 5:22 PM
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The nation's for-profit colleges and universities received more than $1 billion in benefits from the new post-Sept. 11 GI Bill. But some say the for-profit schools aren't policed well enough — which creates an opening for abuses — and their dropout rates are too high.

The nation's for-profit colleges and universities have reaped a windfall from the new post-Sept. 11 GI bill.

The top for-profit companies brought in around a billion dollars in benefits in the last year alone.

Some lawmakers say federal regulations encourage these schools to target current and former members of the military.

At a Senate hearing Thursday, lawmakers and witnesses praised the two-year post-Sept.11 GI bill, saying it had helped many vets and active-duty service personnel go to college.

But Ted Daywalt, president of the service organization VetJobs, says abuses are common.

"The current post-9/11 GI bill has truly been usurped by predatory for-profit schools," he says.

Daywalt says many schools see military people as particularly attractive because their benefits do not count as federal support. It's a very important rule for-profits schools follow: For every $100 a school takes in, only $90 can come from federal money such as student loans or Pell grants. But GI bill funds do not count as federal money in that equation.

Holly Petraeus now looks out for vets at the Consumer Financial Protection Bureau. She says as a result of that exemption, for-profit schools tailor their offerings so they'll appeal to vets and active-duty personnel.

"Easy to sign up, military friendly, you can do it online — but the question is: What is the value of those courses or that degree once you've completed them?" she says.

In many cases, not much, according to Petraeus's editorial in Thursday's New York Times.

Sen. Tom Harkin (D-IA) said at a news conference that these schools have much higher dropout rates than public schools, even though they cost the government a lot more money.

"Public schools [cost] about $4,874 and the for-profit schools $10,875 — so they get this huge dropout rate, but they're charging twice as much as the public schools," he says.

Many feel that the Department of Veterans Affairs and the Department of Defense just don't police these schools closely enough — that was the conclusion of a Government Accountability Office report earlier this year. It said the government does not counsel personnel about websites like GIjobs.com, a private site that steers military folks to the school of their choice — as long as it's on their list of for-profits.

Bob Norton of the Military Officers Association of America says the VA and Defense Department need to monitor students' educational progress.

"Look at degree completion, look at licensing certification, look at the outputs," he says.

That means: Just how many people are graduating, and what kinds of jobs are they getting with those degrees?

The for-profit education industry says there's a good reason why service members and veterans flock to their programs. Brian Moran of the Association of Private Sector Colleges and Universities says his members offer the online courses and flexible schedules that soldiers and vets want.

"It comes as no surprise to us — just recently the GI bill was expanded to include online and non-degree programs of which private sector colleges do and do well," he says.

And there are many members in Congress who support the for-profit schools based in their districts — that makes it unlikely that lawmakers will take dramatic steps.

The Department of Education already faces a court battle and legislative challenges to new rules released earlier this year. They are meant to ensure that all for-profit students find well-paying jobs. [Copyright 2011 National Public Radio]



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